Insights Mindmaps

General Studies-2; Topic: Bilateral, regional and global groupings and agreements
involving India and/or affecting India’s interests

Importance of Chabahar Port for India

1) Introduction
 Indian firm India Ports Global Limited took over operations at the Shaheed Behesti port in
Chabahar.
 The representatives of India, Iran and Afghanistan met and finalised the routes for trade and transit
corridors between the three countries.
 An event has been planned on February 26, 2019 to promote and popularise the potential of
Chabahar.

2) Significance
 Chabahar, which is located 72 kilometres west of Pakistan’s Gwadar port, holds immense strategic
and economic significance for India.
 Chabahar is turning out to be a success story in the India-Iran relationship.
 The port project is the first overseas venture for an Indian state-owned port.
 The Indian takeover of the operations in Chabahar follows re-imposition of sanctions on Iran by the
US.
 The US recognised the importance of Chabahar and exempted Indian firms involved in the port
from sanctions.
 India was also one of the eight countries to receive temporary relief on oil imports from Iran.
 Tehran should acknowledge that it was India’s participation that has earned Chabahar this relief.
 It is also a counter to the China-Pakistan Economic Corridor (CPEC).
 Chabahar port is critical to Delhi's Eurasia strategy & connectivity initiatives in Indo-Pacific region.

3) Advantages
 Chabahar port opens up a permanent alternative route for trade with Afghanistan and Central Asia,
given the hurdles in the direct route through Pakistan.
 The Chabahar port will also set up India's road access to four cities in Afghanistan
 It facilitates India’s role in Afghanistan’s development through infrastructure and education
projects.
 It gives India’s bilateral ties with Iran, a major oil supplier and potential trade market for India, a big
fillip.
 The Chabahar port will cut transport costs/time for Indian goods by a third.
 Chabahar port will reduce Afghanistan’s dependence on Karachi port and, hence, will translate to
less Pakistani leverage over Kabul.
 Chabahar also provides a link to the planned International North-South Transport Corridor.
 This way it also loops in Russia and countries in Central Asia and Europe as beneficiaries.
 According to some estimates, the Chabahar route plus INSTC could boost trade to a total of US$
170 billion from India to Eurasia.
 Chabahar is a rare example of a project in the region which is a win-win for all stakeholders.

4) Concerns / Challenges
 The Chabahar port has received a waiver from the U.S. sanctions on Iran for the moment, but these
concessions could be withdrawn any time.
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 The possibility of the withdrawal of U.S. troops from Afghanistan, will add to security concerns for
Afghanistan and impact on the Chabahar route as well.
 The reconciliation process with the Afghan Taliban is likely to see the regional powers, the U.S. and
Russia engaging Pakistan more.
 This could give Islamabad space to play spoiler in Chabahar, which is seen as a rival port to
Pakistan’s Gwadar.
 Special cargo corridors have been opened with China, Kazakhstan, Turkey, Europe, Russia, the UAE,
and Saudi Arabia, with more trade diverted through them by Afghanistan.
 India’s fears stem from the possibility of Chinese naval presence in the near future in Gwadhar.
 US imposing sanctions on Iran might affect Japan, South Korea and other countries interest in
developing and investing in Chabahar.

5) Way Forward
 It will be important to operationalise the port quickly and smoothen the route to Afghanistan.
 Keeping timelines and delivery of New Delhi’s commitments will be key to the port becoming a
regional hub for transit trade, steel and petrochemicals.
 It will be necessary to encourage Afghan companies to use the route more.

6) Conclusion
 With Chabahar, India has done well to keep a place in the intricate connectivity network of the
region.
 Given all the competing interests over Chabahar, it will require sustained and nuanced diplomacy to
stay ahead in this game.


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